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  • Sino-U.S. Tech Rivalry Continues Despite Trade Deal

  • Netizens Call Out Propaganda on U.S.-Iran Tensions

  • Human Rights Watch Director Barred from Hong Kong, as Protesters Celebrate Taiwan Election


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Shenzhen, China, by hectorlo (CC BY-NC-ND 2.0)

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Sino-U.S. Tech Rivalry Continues Despite Trade Deal

U.S. measures against China’s burgeoning tech sector are set to continue despite an anticipated truce in the two countries’ ongoing trade war, The Wall Street Journal’s Bob Davis and Katy Stech Ferek reported on Tuesday:

Should all the efforts bear fruit, nearly any technology exports to Huawei in particular, and China in general, would require export licenses. While Commerce could grant such licenses, U.S. companies fear their Chinese customers would turn to other suppliers, making them uncompetitive internationally. In 2018, about 36% of U.S. semiconductor company revenues, or $75 billion, came from sales to China, the Semiconductor Industry Association estimates.

[…] The technology offensive comes as the two nations are calling a truce in their two-year trade war. President Trump and Chinese Vice Premier Liu He are scheduled to sign an initial trade pact Wednesday in the White House as broader negotiations continue. The agreement calls for increased Chinese purchases of U.S. goods and services, toughened protection in China of U.S. intellectual property and liberalization of the Chinese financial services market so U.S. companies can better compete there. In exchange, the U.S. has agreed to halve tariffs on $120 billion of Chinese goods to 7.5% and to suspend plans for other tariffs.

The twin efforts—cracking down on technology exports while easing tariffs—represent different factions within the administration that are competing for the president’s attention, say government officials. While there is broad agreement in the administration that China’s power should be checked, there is no consensus among or even within various agencies on the best approach. [Source]

In an exploration of sharpened Sino-U.S. tensions last week, The New Yorker’s Evan Osnos identified technological rivalry as "the most acute standoff between the two countries":

[…] Until recently, executives in Silicon Valley tended to belittle China’s potential in tech, arguing that rigid controls in politics and education would constrain radical innovation. But that view no longer prevails. Under a plan called Made in China 2025, Beijing has directed billions in subsidies and research funds to help Chinese companies surpass foreign competitors on such frontiers as electric vehicles and robotics. A Pentagon report commissioned under Obama warned that the U.S. was losing cutting-edge technology to China, not only through theft but also through Chinese involvement in joint ventures and tech startups. It prompted Congress, in 2018, to tighten rules on foreign investment and export controls.

[…] Senator Mark Warner, of Virginia, the top Democrat on the Intelligence Committee, supports efforts to stop China’s theft of trade secrets, but he calls Trump’s broader strategy “erratic and incoherent.” China’s gains in technology should be “a new Sputnik moment,” triggering huge investment, he said. The U.S. does not have a 5G alternative to compete with China’s, a failure that cannot be blamed on spying. As a share of the economy, America’s federal investment in research and development has fallen to its lowest point since 1955. Warner said, “We’ve always steered away from industrial policy, but we may need to make public-private investments, or government investments, in ‘democracy 5G.’ ”

[…] To avoid catastrophe, both sides will have to accept truths that so far they have not: China must acknowledge the outrage caused by its overreaching bids for control, and America must adjust to China’s presence, without selling honor for profit. The ascendant view in Washington holds that the competition is us-or-them; in fact, the reality of this century will be us-and-them. It is naïve to imagine wrestling China back to the past. The project, now, is to contest its moral vision of the future. [Source]

China’s broad technological advancement was also the focus of The Economist’s most recent Technology Quarterly feature. Asia technology correspondent Hal Hodson addressed the Sino-U.S. rivalry in his introduction:

Much thinking about these issues focuses on what technological capabilities China has and what it lacks, where it is ahead of America and where it is lagging behind. But that piecemeal account offers little help in understanding China’s ability to foster new technologies or to dominate the supply chains and standards that underpin them. The vital question is not what technologies China has access to now, but how it built that access and how its capacity for fostering new technologies is evolving.

That is the focus of this report. Obviously, how the correlation of forces between the two powers ends up is important. But to understand that you also need to come to grips with Chinese technology on its own terms. Details of the processes behind the country’s technological development are vital to assessing the long-term challenge posed by a technologically ascendant China. They can get lost in a higher-level geopolitical discussion that is hyperbolic and polarised.

[…] The potential for new technologies to enhance and project Chinese power, and the threat that poses to a global order led by America, hangs over China’s technological development. But these are not its sole inspiration. China is grappling with an ageing population, environmental degradation and a slowing economy. The strengths and weaknesses of its attempts to solve these problems technologically will have lessons for other countries in similar straits, and for those which see China not just as a competitor but as an ever more sophisticated market. [Source]

Elsewhere, the report surveys several of China’s various technological strengths and weaknesses, arguing, for example, that despite some progress in intellectual property protection, toothless enforcement still undermines innovation. But it adds that "obsessive focus on the handling of IP in China also misses the bigger picture. […] In the case of more complex technologies like vehicles, nuclear plants or semiconductors, other factors matter more—relationships with suppliers, access to affordable labour, the know-how to use the IP at all."

The report examines various levels of China’s AI industry, noting that its vaunted advantage in terms of abundant data lies not just in sweeping collection but in the human labor-intensive subsequent task of processing data to feed and train algorithms. "China’s strength in data-labelling at the very bottom of the AI supply chain is translating into design strength at the top," it adds, noting that while the country stubbornly lags in terms of traditional semiconductors, lessons gleaned from consumer applications are helping boost domestic design, though not yet the manufacture, of specialized chips optimized for AI tasks.

A potentially more decisive iteration of this pattern is highlighted in the automative industry, where China has struggled to catch up in production of internal combustion engines, but is seizing the initiative in the newer arena of electric vehicles. Another article highlights China’s successes in adopting and indigenizing some other established technologies such as nuclear power and high-speed rail. A separate article examines the successes and limitations of China’s industrial policy, credited as a key driver of its technological development.

In the report’s final part, Hodson returns to the question of international rivalry:

Since China will not be capturing a large slice of the semiconductor manufacturing pie any time soon, and because semiconductors are vital to future economic growth, the world’s existing locus of chip production gains heightened strategic importance. That the locus is Taiwan—over which China claims sovereignty, and where America has enough influence to urge restrictions on exports—further complicates the situation. Both American and Chinese firms rely on Taiwan for chip supplies, adding to its potential as a cause of conflict. If the tension between America and China keeps ratcheting up, the island nation could well come under pressure from both sides to curtail its supplies to the other. Any meddling risks upsetting the existing delicate balance and leading in a dangerous direction.

That would have been unthinkable a decade ago. At that time China’s technological progress was mostly unopposed by other powerful countries, which profited from it. But the age of perceived mutual benefit is over. It is hard for the world’s powerful countries, particularly America, to tolerate a China with a global outlook, access to advanced technology and real geopolitical heft. America has reportedly already started pressing the Taiwanese to restrict chip exports to Huawei, the Chinese tech giant, though the Taiwanese government denies it.

America should be careful about such interventions. A clumsy attempt to kneecap Huawei has shown that the Trump administration has little grasp of the dynamics of the technology ecosystem in which it is intervening. Its understanding of other aspects of Chinese technological development is probably even hazier. The threat posed by a technologically enabled Chinese Communist Party is real. In responding to it, America must be sure not to become its own worst enemy. [Source]

Another recent assessment of China’s technological standing came in a year-end letter from Gavekal Dragonomics’ Dan Wang, who critiqued the tendency of such appraisals to focus too narrowly on consumer internet services. Taking a broader view, Wang argued that "the medium-term outlook for China’s technology progress is in my view not so cheerful. […] I think however that long-term prospects are bright."

I spend most of my time thinking about China’s technology trajectory. The main ideas can be summed up in two broad strokes. First, China’s technology foundations are fragile, which the trade war has made evident. Second, over the longer term, I expect that China will stiffen those foundations and develop firms capable of pushing forward the technological frontier.

In my view, there’s not yet much terribly impressive about China’s technology achievements. It’s true that the country leads on mobile payments and the consumer internet, as well as the buildout of infrastructure projects like a high-speed rail network. These however have more to do with differences in the social environment and regulatory regime. More importantly, much of China’s technology stack is built on American components, especially semiconductors. […]

[…] I’ve been quoted in saying that China finds it politically intolerable that the US has an at-will ability to cripple major firms like ZTE and Huawei. It’s now a matter of national security for China to strengthen every major technological capability. The US responded to the rise of the USSR and Japan by focusing on innovation; it’s early days, but so far the US is responding to the technological rise of China mostly by kneecapping its leading firms. So instead of realizing its own Sputnik moment, the US is triggering one in China. I’m surprised that esoteric details like the de minimis threshold of the entity list is starting to be the subject of conversation of educated people in Beijing. Meanwhile, the strategic solution to Chinese problems cannot be more straightforward: replicate American products, or at least find alternative vendors.[Source]

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Netizens Call Out Propaganda on U.S.-Iran Tensions

With U.S.-Iran tensions high following the Trump administration’s January 3 assassination of Iranian Major General Qassim Suleimani, and retaliatory Iranian missile strikes against U.S. military bases in Iraq on January 7, some domestic Chinese online news media faced criticism for spreading misleading rumors about the situation. A January 7 article published on Sohu News (and since deleted), with the byline “FeixiangMeishiJie” (飞翔美食街, literally “Soaring Over Gourmet Street”) suggested that war may be imminent. CDT has translated the relevant paragraphs from the article. Full Chinese text of the article has been archived at CDT Chinese.

US Begs 16 Countries to Intercede with Iran, Prevent War; Iran: “There’s Nothing to Discuss!”

According to a January 5 report by the Tehran Daily, while the Pentagon claims it is rushing thousands of American troops to the Middle East to counter retaliatory action by Iran, and despite the White House’s announcement that if provoked it will launch a massive air strike on 52 key Iranian targets and make Iran “suffer,” Iranian military officials state that the U.S. has in fact withdrawn from Iran’s border regions in order to avert all-out war between the two countries. At the same time, the U.S. has pleaded with 16 other countries to mediate on its behalf and prevent the outbreak of war by all means possible. But Iran says “there’s nothing to discuss” and that they must take definitive action against the U.S. 

[…] Jahroumi [Zhanuli 扎努里], the chair of Iran’s National Security and Foreign Policy Committee said that no American will be safe in the Middle East after Soleimani’s assassination, which he said violated international law and military law and constitutes a true act of terrorism. He added that the US should wait for Iran’s “sword of revenge,” and that Iran has the right to take full retaliatory action. As for the latest round of America’s outlandish threats, Iranian generals remain unfazed and stress that the US would not dare to fully confront Iran. They say that hundreds of thousands of soldiers are right now awaiting the command from the Grand Ayatollah Khamenei to make the US regret its foolish decision to murder Soleimani. [Chinese]

The quote attributed to the chair of Iran’s National Security and Foreign Policy Committee is unsourced, and may have been fabricated for the article

Some netizens recognized the coverage as part of a pattern of Chinese propaganda reactions to international news. CDT Chinese has archived a few netizen responses to the Sohu article, which are translated below:

Screenshot of Sohu News article.

@E******71:While the media behind the Great Firewall broadcasts this clickbait, there’s irrefutable evidence that Iran shot down a passenger plane. The “wall media” should open their coverage with “according to the American media.” No need to read the comments, you know it’ll just be all “you can’t trust the American media” and “the U.S. staged the whole thing.”

@TuC******ws: I would have beaten them up a long time ago if you weren’t blocking me. 

@you******huo: These dumb-ass public accounts are always making stuff up. It’s this “patriotic news system” they created after Xi took office. 

@wh******rld: Add one more sentence: “Regretting his actions, Trump is hiding in the air-raid shelter and not daring to come out.”

@MA******lOg5: The CCP is again whistling at night, trying to give itself courage!

@20******er: Reading this article reminds me of… 

Headline: “As War Looms, He Builds a House; Maintaining Grace Under Pressure: Why Saddam Is Not Scared” 

Responding to reporters’ questions about the emerging situation in the Middle East following the killing of Suleimani, China’s Foreign Ministry Spokesperson said “we oppose the use of force in international relations,” and later “China is highly concerned about the current situation in the Middle East. Worsening of tensions in the Middle East and the Gulf region is the last thing anyone wants to see. Ensuring peace and stability in the region is of vital importance to the whole world.”

For more on how the Iran-U.S. standoff relates to China, see Didi Kirsten Tatlow’s survey of Beijing’s multitudinous relations in the region at DGAP Online Commentary, “Trump’s Gift to China” by Minxin Pei at Project Syndicate, or Trump Administration’s Actions in Middle East Complicate Its Criticisms of China” by Edward Wong at The New York Times. 

Translation by Anne Henochowicz.

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Human Rights Watch Director Barred from Hong Kong, as Protesters Celebrate Taiwan Election

Kenneth Roth, Executive Director of Human Rights Watch, was barred entry to Hong Kong, where he planned to hold a press conference to release the organization’s annual report. Officials offered no reason for the move.

Neil Vigdor and Austin Ramzy report for The New York Times:

The barring of Mr. Roth, an American, from Hong Kong follows similar entry bans on a handful of journalists and human rights observers in recent years, raising concerns in a city that has long prided itself on upholding the democratic values of freedom of speech and information.

Hong Kong has been roiled by more than seven months of antigovernment protests rooted in anger at the encroachment of Chinese power on the semiautonomous territory. The local government is under pressure from the authorities in Beijing to restore order as well as defend its image abroad.

Human Rights Watch noted that Mr. Roth had previously visited Hong Kong many times, including in April 2018 to draw attention to a report on gender discrimination in the Chinese job market.

“It’s sad testament to the deterioration in basic freedoms in Hong Kong that I would be barred less than two years later,” he said by email. [Source]

The Chinese government has defended the move, casting blame on Human Rights Watch and other foreign organizations for supporting and even orchestrating the ongoing protest movement, which is in its seventh month. Throughout the protests, the Chinese government has blamed foreign “hostile forces” for fueling the unrest. In December, the government announced undefined “sanctions” on five U.S.-based non-governmental organizations, including Human Rights Watch, which it said had played an “egregious role” in the Hong Kong protests. AFP reports on today’s Foreign Ministry press briefing:

“Allowing or not allowing someone’s entry is China’s sovereign right,” foreign ministry spokesman Geng Shuang said at a regular press briefing.

“Plenty of facts and evidence show that the relevant NGO has through various means supported anti-China radicals, encouraged them to engage in extremist, violent and criminal activity, and incited Hong Kong independence separatist activities,” Geng said.

“They bear major responsibility for the current chaos in Hong Kong. These organisations should be punished, and should pay the proper price.” [Source]

Protests in Hong Kong have continued, with protesters newly invigorated by election results in Taiwan, where the Democratic Progressive Party incumbent Tsai Ing-wen won in a landslide over Kuomintang’s Han Kuo-yu, who had been heavily favored by and supportive of the Chinese government. In local district council elections in Hong Kong in November, pro-democracy candidates soundly defeated Beijing-backed opponents. Alice Fung reports for AP on a rally in Hong Kong on Sunday:

Representatives of allied activist groups from Canada, Europe and Taiwan made remarks and led the attendees in chants of “Fight for freedom! Stand with Hong Kong!”

Speakers also celebrated the results of Saturday’s presidential election in Taiwan that saw the Democratic Progressive Party’s Tsai Ing-wen voted to a second term in a landslide.

Months of anti-government protests in Hong Kong, a semi-autonomous Chinese territory, have driven home to many in Taiwan the contrast between their democratically governed island and authoritarian mainland China.

“The Taiwanese demonstrated how peaceful it could be if we have democracy,” said rally organizer Ventus Lau.

“And we have to understand the Taiwanese fought hard in previous decades so that they can have this power today,” Lau said. “So if we want to have democracy like them, we need to fight hard and to continue our fight with the Communist Party.” [Source]

While the Hong Kong protests started in response to a proposed, and since scrapped, extradition law, the focus has since expanded and in recent months police violence has been at the top of many protesters’ lists of urgent concerns. A new report by the watchdog overseeing the Hong Kong Police Force has found “many shortcomings” in the police response to protests, according to a report from Iain Marlow and Natalie Lung at Bloomberg:

The 300-page report from the Independent Police Complaints Council found a failure to separate peaceful demonstrators from violent protesters, the newspaper reported Monday, citing unidentified people. The probe also determined there was a lack of communication among front-line police commanders during protests and insufficient “cease-fire” guidelines when using tear gas, the paper said.

The report, which hasn’t yet been officially released, is scheduled to be discussed at a meeting of the IPCC this week. If approved, it would be submitted to Hong Kong Chief Executive Carrie Lam for possible release in the coming weeks. [Source]

The recent appointment of former Shanxi CCP chief Luo Huining as the head of the China liaison office in Hong Kong is expected by some to usher in a harder line on the protest movement.

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